EXHIBIT 10.25

                              EMPLOYMENT AGREEMENT

         This Employment Agreement ("Agreement") is made as of January 1, 1999,
between Resource Bank ("Resource"), and Lawrence N. Smith ("Employee").

         WHEREAS, Resource wishes to employ Employee to serve as its Chief
Executive Officer and the President and Chief Executive Officer of Resource
Bankshares Corporation, and Employee is willing to accept such employment in
accordance with the terms of this Agreement; and

         WHEREAS, Employee recognizes the importance to Resource and to the
public of maintaining the high standards and quality associated with Resource's
name and reputation, and is willing to maintain such high standards and quality;

         NOW, THEREFORE, it is agreed as follows:


1.       TERM OF EMPLOYMENT: Subject to the provisions of this Agreement,
         Resource will employ Employee as its Chief Executive Officer and the
         President and Chief Executive Officer of Resource Bankshares
         Corporation for an initial term of five (5) years, beginning on January
         1, 1999 and expiring on December 31, 2003 ("Initial Term"). Not less
         than six (6) months prior to the expiration of the Initial Term,
         Resource's Board of Directors (the "Resource Board of Directors") shall
         conduct and complete a review of Employee's performance.

         1.1 If the Resource Board of Directors determines upon such review
             that Employee has performed in accordance with Resource's
             performance criteria, no further action will be necessary, and
             Resource shall employ Employee for an additional two-year
             period under the terms herein. Thereafter, this Agreement
             shall automatically renew for successive two-year periods
             unless either party gives three (3) months written notice
             prior to the expiration of any two-year term.

         1.2 If the Resource Board of Directors determines upon such review
             that Employee has not performed in accordance with Resource's
             performance criteria, it shall so notify Employee in writing
             at least three (3) months prior to the expiration of the
             Initial Term hereof that this Agreement will not be renewed
             ("Notice of Non-Renewal"), and this Agreement shall expire and
             the employment created herein shall end at the conclusion of
             the Initial Term. Employee shall also receive three additional
             month's regular base salary following expiration pursuant to
             Resource's regular pay schedule.

         1.3 The regular base salary payable both prior to and following
             expiration as provided in subparagraph 1.2 shall not be paid
             if Employee competes with Resource as that term is used in
             subparagraphs 7.2 and 7.3 hereof.

         1.4 Resource, in its sole discretion, shall have the option but not the
             obligation of relieving Employee of actually performing any
             services following the giving of a Notice of Non-Renewal.  Employee
             shall nonetheless be paid as provided in

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             subparagraph 1.2 provided he neither seeks or accepts employment in
             competition with Resource as provided in subparagraph 1.3 nor
             breaches any other provision hereof.

2.       DUTIES: During the period of employment hereunder, Employee will devote
         his best efforts and substantially his full time to the business and
         affairs of Resource, perform such services not inconsistent with his
         position as are designated by the Resource Board of Directors, and use
         his best efforts to promote the interest of Resource. Employee pledges
         that during the term of this Agreement, Employee shall not, directly or
         indirectly, engage in any business that could detract from Employee's
         ability to apply his best efforts to the performance of his duties
         hereunder. Employee further agrees to comply with all rules,
         regulations and policies established or issued by Resource.

3.       COMPENSATION: Resource will pay Employee a regular base salary
         commensurate with his position and performance, such salary to be
         determined from time to time by the Resource Board of Directors, but to
         be not less than $262,500 upon the initiation of this Agreement. Such
         salary will be payable in periodic installments on the same basis as
         that of other employees of Resource who hold executive positions. In
         addition, Employee will be eligible to participate in Resource's Bonus
         Program as determined from time to time by the Resource Board of
         Directors.

4.       BENEFITS: Employee will participate in the various employee benefit,
         disability and retirement plans provided for similarly situated
         employees according to the terms and conditions of those plans, as
         determined by the Resource Board of Directors. During each full year of
         employment, Employee shall have 5 weeks paid vacation. During
         Employee's employment with Resource, Employee will be provided with a
         leased automobile. Resource reserves the right to modify, eliminate, or
         add to any of the foregoing benefits as it deems appropriate.

5.       DEATH: If Employee should die during the term of this Agreement,
         Resource will, in lieu of payments due under other provisions of this
         Agreement, pay to Employee's estate for a period of 3 months,
         Employee's regular base salary at the time of the Employee's death plus
         any previously accrued and unpaid compensation. Thereafter, Resource
         will have no further obligation to Employee or his estate under this
         Agreement.

6.       DISABILITY: In the event that Employee, by reason of physical or mental
         incapacity or disability ("Disability"), is unable, with or without
         reasonable accommodation, to perform his duties and responsibilities
         under this Agreement, then Resource will pay to Employee his regular
         base salary for a six (6) month period following the date on which the
         Disability first begins, after which time it is intended that the
         payments under the disability insurance maintained by Resource for
         Employee will be in effect. Thereafter, Resource will have no
         obligation to pay Employee any compensation under this Agreement;
         provided, however, that for a period of one (1) year following the date
         the Disability first begins, Employee shall have the right to return to
         employment under this Agreement if Employee, with or without reasonable
         accommodation, is again able to fully perform his duties. Upon such a
         return to employment, Employee shall work as mutually agreed upon by

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         Resource and Employee, and Employee shall receive the same compensation
         and benefits as set forth in this Agreement, subject to appropriate
         proration of compensation if Employee works less than the same schedule
         he had previously worked.

7.       TERMINATION WITHOUT CAUSE; SEVERANCE PAY:

         7.1 Resource may terminate Employee's employment immediately and
             without cause. However, if Resource terminates employee's
             employment pursuant to this Section 7.1, Resource shall pay to
             Employee his regular base salary payable in periodic installments
             on the same schedule as other executive employees of Resource
             through the lesser of (i) the remainder of the Initial Term of
             this Agreement or (ii) a period of thirty six (36) months
             following the date on which employment is terminated
             ("Severance Pay"). Notwithstanding the foregoing, in the event
             Employee elects to compete with Resource or any of its
             subsidiaries as described below, Resource's obligation to pay
             the Severance Pay shall terminate immediately.

         7.2 Employee agrees that in the event he competes, directly or
             indirectly, with Resource or any of its subsidiaries within a
             30-mile radius of any Resource office, or any of its subsidiaries'
             offices, that exist on the date of such termination he will
             forfeit any remaining Severance Pay from the first date of
             such competition.

         7.3 It is the specific intent of the parties that as long as Employee
             is receiving Severance Pay, Employee shall be restricted from
             competing directly or indirectly with any segment of
             Resource's or its subsidiaries' business in which Employee
             engaged prior to the termination of employment and from any
             segment of Resource's and its subsidiaries' business, about
             which Employee acquired proprietary or confidential
             information, during the course of his employment. Resource's
             and its subsidiaries' business shall mean the business of
             banking and mortgage lending. Employee agrees that competition
             shall include engaging in competitive activity, either as an
             individual, as a partner, as a joint venturer with any other
             person or entity, or as an employee, agent, or representative
             of any other person or entity, or otherwise being associated
             in a competitive capacity with any business entity which
             directly or indirectly competes with Resource or any of its
             subsidiaries. Employee further agrees that for as long as he
             receives severance pay, he will not induce or attempt to
             induce any of the employees of Resource or its affiliates to
             terminate their agreement.

         7.4 Resource and Employee have examined in detail this paragraph 7 and
             agree that the restraint imposed upon Employee is reasonable
             in light of the legitimate interests of Employer, and it is
             not unduly harsh upon Employee's ability to earn a livelihood.

         7.5 Notwithstanding any provision of this Agreement to the contrary,
             any payments made to Employee pursuant to this Agreement, or
             otherwise, are subject to and conditional upon their
             compliance with 12 U.S.C. ss. 1828(k) and any regulations
             promulgated thereunder.

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8.       TERMINATION FOR CAUSE: The employee's employment may be terminated at
         any time by Resource for "cause." As used in this Agreement, the term
         cause may mean personal dishonesty; gross neglect related to
         employment; incompetence; willful misconduct; breach of loyalty or
         fiduciary duty to Employer; intentional failure to perform assigned or
         agreed upon duties; willful violation of any law, rule, or regulation
         (other than traffic violations or similar offenses); or material breach
         of any provision of this Agreement. Termination by Resource for cause
         shall be determined by the vote of at least 51% of all of the members
         of the Resource Board of Directors. If the employment is so terminated,
         Employee will be entitled to receive any regular salary earned and
         employee benefits accrued as of the date of such termination, but
         Resource will have no further obligation to Employee hereunder from and
         after such date.

9.       TERMINATION BY EMPLOYEE: Employee may resign from the employment of
         Resource at any time upon ninety (90) days prior written notice. Upon
         such resignation, Employee shall have no rights to any further
         compensation or benefits after the ninety (90) day notice period has
         expired. Resource reserves the option but not the obligation to relieve
         Employee from performance of work during this period, but absent
         subsequent breach hereof, Resource shall be obligated to pay Employee
         the Employee's regular base salary for the entire 90-day notice period.

10.      CHANGE OF CONTROL: If there shall occur a "Change of Control of
         Resource" as defined below, the employee may be assigned such other
         duties, responsibilities and compensation as would be reasonably
         equivalent under the circumstances and acceptable to the Employee in
         his reasonable discretion. Upon such occurrence, if the Employee shall
         not be given such reasonably equivalent duties, responsibilities and
         compensation, he may be terminated or he may resign; and, in either
         such case, Employee shall receive in lieu of any payments pursuant to
         paragraph 7, a one-time payment of 2.99 times the average of the last
         three (3) years' regular base salary, or if employed less than three
         years, a one-time payment of 2.99 times Employee's regular base salary
         in effect when the change of control occurs. As used in this paragraph
         10, a Change of Control of Resource shall be deemed to have occurred if
         any of the following occur:

         10.1 Any "person" (as such term is used in Sections 13(d) and 14(d)(2)
              of the Securities Exchange Act of 1934) is or becomes the
              beneficial owner, directly or indirectly, of securities of
              Resource representing twenty-five percent (25%) or more of the
              combined voting power of Resource's then outstanding
              securities; or

         10.2 During any period of two consecutive calendar years, individuals
              who at the beginning of such period constitute the Resource Board
              of Directors cease for any reason to constitute a majority
              thereof unless the election by Resource's Shareholders of each
              new director was approved by a vote of at least two-thirds of
              the Resource directors then still in office who were directors
              at the beginning of the period.

         10.3 The approval by Resource's shareholders of the merger or
              consolidation of Resource with any other corporation or
              business organization, the sale of substantially all of the
              assets of Resource or the liquidation or dissolution of

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              Resource, unless, in the case of a merger or consolidation,
              the directors of Resource in office immediately prior to such
              merger or consolidation will constitute at least two-thirds of
              the directors of the surviving corporation or business
              organization of such merger or consolidation and any parent
              (as such term is defined in Rule 12b-2 under the Securities
              Exchange Act of 1934) of such corporation or business
              organization.

11.      REQUIRED PROVISIONS:

         11.1 If Employee is suspended and/or temporarily prohibited from
              participating in the conduct of Resource's affairs by a notice
              served under the Federal Deposit Insurance Act, Resource's
              obligations under this Agreement shall be suspended as of the
              date of service. If the charges in the notice are dismissed,
              Resource may, in its discretion, (i) pay Employee all or part
              of the compensation withheld while its obligations under the
              Agreement were suspended, and (ii) reinstate (in whole or in
              part) any of its obligations which were suspended.

         11.2 If Employee is removed and/or permanently prohibited from
              participating in the conduct of Resource's affairs by an order
              issued under the Federal Deposit Insurance Act, all
              obligations of Resource under this Agreement shall terminate
              as of the effective date of the order, but the Employee's
              vested rights shall not be affected.

         11.3 If Resource is in default as defined in the Federal Deposit
              Insurance Act, all obligations under this Agreement shall
              terminate as of the date of default, but the operation of this
              subparagraph 11.3 shall not affect any of Employee's vested
              rights.

12.      NONDISCLOSURE:

         12.1 Employee agrees to hold and safeguard any information about
              Resource and its subsidiaries gained by Employee during the course
              of Employee's employment. Employee shall not, without the prior
              written consent of Resource, disclose or make available to
              anyone for use outside Resource's and its subsidiaries'
              organization at any time, either during his employment or
              subsequent to any termination of his employment, however such
              termination is effected, whether by Employee or Resource, with
              or without cause, or expiration or nonrenewal of this
              Agreement, any information about Resource and its subsidiaries
              or its customers or suppliers, whether or not such information
              was developed by Employee, except as required in the
              performance of Employee's duties for Resource and its
              subsidiaries.

         12.2 Employee understands and agrees that any information about
              Resource and its subsidiaries or Resource's and its subsidiaries'
              customers is the property of Resource or its subsidiaries and is
              essential to the protection of Resource's and its
              subsidiaries' goodwill and to the maintenance of Resource's

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              and it subsidiaries' competitive position and accordingly
              should be kept secret. Such information shall include, but not
              be limited to, information containing Resource's and its
              subsidiaries' promotional plans and strategies, pricing
              strategies, customers and prospective customers, customer
              lists, identity of key personnel in the employ of customers
              and prospective customers, computer programs, system
              documentation, manuals, ideas, or any other records or
              information belonging to Resource and its subsidiaries or
              relating to Resource's and its subsidiaries' business.

13.      NON-SOLICITATION OF EMPLOYEES: Employee agrees that during his
         employment hereunder and for a period of one year following termination
         of Employee's employment, whether such termination is voluntary or
         involuntary, effected by Resource or by Employee, regardless of cause,
         Employee shall not, directly or indirectly, hire, solicit or induce or
         attempt to hire, solicit or induce, any employee of Resource to become
         employed by Employee or any other person or entity or to perform
         services for remuneration for Employee or any other person or entity
         regardless of the structure or nature of any such remunerative
         relationship. For purposes of this paragraph 13, an employee of
         Resource shall mean any individual who was employed by Resource or any
         of its subsidiaries at the time of Employee's termination or at any
         time during the six-month period immediately preceding such
         termination. This paragraph does not apply in the event of "Change of
         Control of Resource" as defined in paragraph 10.

14.      ENTIRE AGREEMENT: This Agreement supersedes any and all other
         agreements, either oral or in writing, between the parties hereto with
         respect to the employment of Employee by Resource or any affiliate of
         Resource and contains all the covenants and agreements between the
         parties with respect to such employment. Each party to this Agreement
         acknowledges that no representations, inducements, promises or
         agreements, orally or otherwise, have been made by any party, or anyone
         acting on behalf of any party, which are not embodied herein, and that
         no other agreement, statement or promise not contained in this
         Agreement will be valid or binding. Any modification of this Agreement
         will be effective only if it is in writing signed by the party to be
         charged.

15.      BINDING EFFECT:  This Agreement will be binding upon and inure to the
         benefit of each of the parties and their successors.

16.      LAW GOVERNING AGREEMENT: This Agreement will be governed and construed
         in accordance with the laws of the Commonwealth of Virginia.

17.      CONFLICT WITH REGULATIONS:  The requirements of 12 C.F.R. ss. 563.39(b)
         (the "Employment Agreement Regulations") shall be made part of this
         Agreement and are incorporated by reference.  If any provision
         of this Agreement conflicts with the Employment agreement Regulations,
         the Employment Agreement Regulations shall govern.

18.      PARTIAL INVALIDITY: If any provision of this Agreement is held by a
         court of competent jurisdiction to be invalid, void or unenforceable,
         the remaining provisions will nevertheless continue in full force and
         effect.

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19.      SEVERABILITY: If any clause or provision of this Agreement is held to
         be illegal, invalid, or unenforceable under present or future laws
         effective during the term hereof, then the remainder of this Agreement
         shall not be affected thereby, and in lieu of each clause or provision
         of this Agreement which is illegal, invalid or unenforceable, and
         specifically including the restrictions on competition in paragraph 7,
         there shall be added, as a part of this Agreement, a clause or
         provision as similar in terms to such illegal, invalid or unenforceable
         clause or provision as may be possible and as may be legal, valid, and
         enforceable.

20.      NOTICES: Any notices to be given hereunder by either party to the other
         may be effected either by personal delivery in writing or by mail,
         registered or certified, postage prepaid, with return receipt
         requested. Mailed notices will be addressed to the parties at the
         addresses appearing herein, but each party may change his address by
         written notice in accordance with this paragraph. Notices delivered
         personally will be deemed communicated as of actual receipt; mailed
         notices will be deemed communicated as of five (5) days after mailing.

                           TO:      Resource Bank
                                    Attention:  Debra C. Dyckman
                                    3720 Virginia Beach Boulevard
                                    Virginia Beach, Virginia 23452



                           TO:      Lawrence N. Smith
                                    127 Pinewood Road
                                    Virginia Beach, VA 23451



21.      COUNTERPARTS:  This Agreement may be executed in counterparts, together
         which shall constitute one and the same instrument.


         IN WITNESS WHEREOF, Resource Bank has caused this Agreement to be
executed in its name and behalf by its proper officers, thereunto duly
authorized, and Employee has set his hand as of the date first above written.


EMPLOYEE'S NAME                             RESOURCE BANK

/s/ Lawrence N. Smith                       By:      /s/ John B. Bernhardt
---------------------------                     ------------------------------
Signature                                              John B. Bernhardt

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  Lawrence N. Smith                         Its:       Chairman of the Board
---------------------------                      ----------------------------
Printed Name

Date:                                       Date
      ----------------------                     -----------------------

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                     FIRST AMENDMENT TO EMPLOYMENT AGREEMENT


         This First Amendment to Employment Agreement ("Agreement") is effective
as of January 1, 1999 by and between Resource Bank ("Resource") and Lawrence N.
Smith ("Employee") (collectively the "Parties").

                                    RECITALS:


         1. The Parties have entered into an Employment Agreement dated January
1, 1999 ("Original Employment Agreement").

         2. The Parties desire to amend the Original Employment Agreement as set
forth herein.

                                    AGREEMENT

         In consideration of the premises and the mutual promises herein made,
it is hereby agreed that:

         1. Whenever the term "Resource" is used in Section 10 of the Original
Employment Agreement, such term shall mean Resource Bankshares Corporation.

         2. This Agreement may be signed in one or more counterparts, all of
which together shall constitute one and the same instrument.

         3. Except as otherwise specifically set forth herein, the terms and
conditions of the Original Employment Agreement shall remain in full force and
effect.

         IN WITNESS WHEREOF, the Parties have executed this instrument on the
date written above.


         EMPLOYEE NAME                           RESOURCE BANK

         /s/ Lawrence N. Smith                    By       /s/ T.A. Grell, Jr.
      ----------------------------                    -------------------------
         Signature                                          T.A. Grell, Jr.

      ----------------------------                Its:   President
         Lawrence N. Smith                            -------------------------

         Date:                                    Date:
               --------------------                     -------------------

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